Monday, April 18, 2016
[Video] Find Hidden Flaws in Any Trading System...Using Trading KPI's
Business managers, engineers, Pentagon planners, and financial experts all model their projected results. So should traders.
Traders routinely get into trouble with one strategy or another because they focus on one or two Key Performance Indicators (KPI's), such as % winning trades, or % gain per trade. The truth is that there are at least 8 essential KPI's -- Account Size, Position Size, Trades per Month, Hold Period, % Winners, % Gain per Trade, % Loss per Loser (or Trailing Stop), % Exposure -- and they all interact with each other.
Some KPI's, like % Gain per Trade, are not nearly as important as you might think. And when you look at all the KPI's of a trading strategy together, you will quickly see that many trading systems have absolutely no chance of succeeding! Even if you are producing great buy signals!
Are you ready to put your assumptions put to the test?
Join Roy Swanson and he will show you how to:
See which of your trading assumptions are just wishful thinking
"Right-size” your buys to be in line with your strategy & account size
Why your "average hold period" is more important than just about anything else
Avoid the common trap of ignoring cash flow -- the fatal error lurking in most trading systems
This will be an interactive session where you can ask Roy to model the KPI's of your own trading system. Please take note of your current results so you can contribute to the discussion.
About Roy Swanson
Roy Swanson is the founder of SteadyTrader.com. A veteran trader and math geek, he started trading at the dawn of the online brokerage era, and was even asked by DL&J if he wanted to work on derivatives, back when they first became popular in the late 1990’s.
Roy has consulted for some of the best-known names in the trading strategy world (and still does). Last year, he decided it was time to turn his no-nonsense, professional approach to trading into tools that average traders can use in their own trading.
041516 MetaStock – Use Dark Pools Chart Patterns for Higher Profits
Use Dark Pools Chart Patterns for Higher Profits
How to Calculate the True Cost of Your Trading
To use Dark Pools Chart Patterns for higher profits is an area of Technical Analysis that has not made its way into most stock market books, articles, and information available on the internet. The reason why Dark Pool technical patterns aka footprints are not yet part of the Technical Analysis standard of teaching is that these are NEW chart patterns.
Dark Pools did not exist in the 1980’s, 1990’s, or early 2000’s decades. These are relatively new trading venues for the giant Institutions who demanded obscurity, due to the rise of the High Frequency Trading Firms HFTs in the mid 2000 decade after the switch from fractions to decimals. Basically HFTs morphed out of the Small Order Execution System SOES Bandits, during the rouge Floor Traders era.
Just as an interesting note, did you know that the Flash Crash of May 2010 was caused by an error in an Institutional order? Instead of using a Time Weighted Average Price TWAP order, the fundamental trader used a Volume Weighted Average Price VWAP order. VWAPs trigger on rising Volume, which then triggers more and more orders. TWAP is the appropriate order for Quiet Rotation™ and Quiet Distribution, as well as Quiet Accumulation.
A Retail Day Trader can no longer see the large lot activity on their level 2 screens, as nearly all large lots are transacted nowadays on the hidden venues called Dark Pools which are used by giant Institutions. However what can not be hidden, is the easy to identify Dark Pool footprints on the stock charts.
There are many different types of Dark Pool footprints the giant Institutions leave on charts, due to their preferred professional Order Types.
One of the more common footprints happening is the “Basing Bottom Formation,” which is a brand new type of bottoming formation. In order to use Dark Pool Chart Patterns for higher profits, the key element in this pattern is to identify the Dark Pool Quiet Accumulation before the stock runs up with an early entry.
However early entry can be problematic if a trader is using Price and Time Indicators, and both Momentum and Price Oscillators. You may get an early crossover, but then the stock moves sideways up and down in a choppy pattern that causes whipsaw exits and losses.
Another problem getting in early is that many Retail Traders wait and wait for signals from Momentum Indicators, which gets them into the stock very late in the run. This means instead of a high profit trade, the Retail Trader takes a meager profit.
True profit is one big part of trading that most traders fail to include in profit evaluation. How to calculate the true cost of your trading is considering more than just the cost of Charting Software, Broker fees and charges, and possibly subscriptions to Newsletters.
To accurately calculate whether a trade is profitable or not, you must also include ALL of the normal business expenses for Trading as a Business. Otherwise you are deluding yourself as to your profitability in trading.
Trading as a Business includes the following:
1. You MUST pay yourself something for your time. How much could you make an hour, working for a corporation in your field of expertise or your degree? That is the minimum amount you should use as a base for trading expense as an hourly wage.
2. You must also include the average losses. You must take an average of your losses each month and divide it into your trades per month, and subtract that loss from your profits of every profitable trade.
3. Other expenses include your computer, printer, and other hardware depreciation.
4. In addition there is the office space in your home, electricity, internet, phone, and office expenses such as paper, pens, and journals.
5. Finally add up the cost of time attending webinars, the reading articles, and also if you pay a a simulator fee.
Summary
If you did an accurate and thorough calculation of your TRUE trading costs, you would find that taking a .25 cent profit on a 100-1000 share trade is not at all profitable. You are actuality losing money every time you trade.
So learning how to enter a stock trade earlier based on recognizing a Dark Pool Buy Zone™ is crucial, and can turn your trading hobby into a career that all your friends envy and admire.
Trade Wisely,
Martha Stokes CMT
TechniTrader technical analysis using a MetaStock chart, courtesy of Innovative Market Analysis, LLC dba MetaStock
Instructor & Developer of TechniTrader Stock and Option Courses
This weekly stock discussion is sponsored by TechniTrader.com a MetaStock® Partner
Copyright ©2016 Decisions Unlimited, Inc. dba TechniTrader. All rights reserved.
TechniTrader is also a registered trademark of Decisions Unlimited, Inc.
Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only.
Monday, April 4, 2016
METASTOCK LEIBOVIT VOLUME REVERSAL FOR GENERAL CANNABIS - CANN - APRIL 4, 2016
From the desk of Mark Leibovit.
The Leibovit Volume Reversal has been demonstrated as useful in all time frames and in all market where volume is available - even in the penny stock market. My VR Vice Letter covers a large list of 'sin' or 'vice' names ranging from gaming, alcohol, tobacco and cannabis (marijuana) shares. There are probably 200 publicly traded 'penny' marijuana related names and we track and trade those at the Vice Letter. Here, as a demonstration of its applicability in that arena, this week I am presenting General Cannabis (CANN). Take a look.
Friday, March 25, 2016
METASTOCK LEIBOVIT VR TUTORIAL ON VRX - VALEANT - MARCH 25-28, 2016
From the desk of Mark Leibovit:
My video this week takes a look at Valeant (VRX) whose story has been beaten to death (probably helped cause it to decline) by CNBC. We are always looking for stocks or ETFs or Futures (in all time frames) that show a strong correlation to my Volume Reversal analysis. In theory, the Volume Reversal should work everywhere, but there are clearly some instances where it works better and seeking those out and using those for trading becomes a priority.
My video this week takes a look at Valeant (VRX) whose story has been beaten to death (probably helped cause it to decline) by CNBC. We are always looking for stocks or ETFs or Futures (in all time frames) that show a strong correlation to my Volume Reversal analysis. In theory, the Volume Reversal should work everywhere, but there are clearly some instances where it works better and seeking those out and using those for trading becomes a priority.
Monthly chart: A Leibovit Negative VR formed September, 2015 was a clear sell signal accompanied by a declining 5/3/3 stochastic. Scanning back to December. 2012 a Leibovit Positive VR accompanied by a rising 5/3/3 stochastic set a positive tone for months to come.
Weekly chart: A Leibovit Negative VR on September 28 provided the most recent near-term downside trade. A Leibovit Negative VR on February 29 provided the most recent short-term weekly trade. Both were accompanied by a declining 5/3/3 stochastic.
Daily chart: The three most recent VR signals worked nicely signaling two to four day trades. A Leibovit Negative VR on February 29, A Leibovit Positive VR on March 7 and a Leibovit Negative VR on March 15.
Monday, March 21, 2016
METASTOCK LEIBOVIT VOLUME REVERSAL TUTORIAL FOR FCX AND WYNN - MARCH 21, 2016
From the desk of top market timer Mark Leibovit,
https://youtu.be/8EjzswBEBN8
WYNN (WYNN RESORTS) topped out at 249 in March, 2014 and nosedived to 50 in January, 2016. It was clearly on my watch list and we've discussed it before in these updates. A series of Leibovit Positive Volume Reversals started on January 15. Please note the beautiful Leibovit Positive Volume Reversal on March 10 accompanied by a rising 5/3/3 stochastic which set up the most recent trade. We took profits at vrtrader.com as WYNN surged into the mid-90s following a big opening gap Friday morning. My view is that WYNN can still go higher, but let's wait for a pullback back to the old high at 88.87 or fill Friday's gap at 89.28.
FCX (FREEPORT MCMORAN) topped out at 61.34 in January, 2011 and nosedived to 3.52 this past January, 2016. Three big Leibovit Positive Volume Reversals on February 12, March 10 and March 16 all accompanied by a rising 5/3/3 stochastic which triggered trading buys. We 'rang the register' here as well Friday morning over 11.00 with a view to pullback following a three day run to the upside.
We have been trading WYNN and FCX several times in recent weeks.
Monday, March 14, 2016
031116 MetaStock - Understanding Momentum Run Action MLHR chart
Understanding
Momentum Run Action
How to Use Momentum
Price Action for Higher Profits
Most Retail Traders exit runs too early, losing most of their
profits from a Momentum Run when Swing or Day Trading. Indicators that reveal
weakening or stronger patterns in runs can help Traders hold during brief
episodes of Resting Days or mild profit taking, allowing for much higher Return
On Investment ROI for that trade.
Two indicators that help Traders during a Momentum Run are the
TechniTrader Volume Accumulation TTVA and the TechniTrader Flow of Funds TTFF.
The TTVA indicator is a center line Volume Oscillator,
designed to show when Dark Pool accumulation starts and when the run is
starting to lose momentum energy before profit taking or reversal. The TTFF
indicator provides additional information as to how much activity is coming
from the Buy Side Institutions, as opposed to just Retail Traders or Investors.
The combination of these two indicators helps Swing, Momentum,
and Day Traders make better hold and exit decisions resulting in lower risk,
less stress, and higher profits for each trade.
When a Trader can increase the profits of every trade made it
increases their monthly income, reduces the risk of choosing weaker stock picks
just to have something to trade, and helps to gain confidence while developing
the skills of trading.
Regardless of which MetaStock trading system or strategy you
employ to find stocks to trade, finalizing the selection using leading Hybrid Indicators
will dramatically reduce weak trades that net losses, and will increase profits
with stronger picks that run more points.
The chart example below shows a very common Momentum Run
action, that is occurring right now in many stocks.
This is due to Dark Pool Quiet Accumulation going on, which
is hidden from those trading on the Exchanges, Electronic Communication
Networks ECNS, and other venues. When Dark Pools accumulate, they are removing
vast quantities of liquidity, and this in turn creates the Momentum Runs out of
a bottom low.
In the chart example see the first long green arrow indicating
where TTVA signaled early that a Dark Pool Buy Zone™ was trigged, and then the
stock drops to its final low. By knowing in advance that Dark Pools have
commenced accumulation even while the stock makes a lower low, allows Swing Traders
to prepare for the sudden upside Momentum Runs that follow.
TTFF tells the Trader that this is a few giant Buy Side
Institutions bargain hunting to invest funds, and that Smaller Funds are not
yet aware of their giant lot buying on the Alternative Trading Systems ATS Dark
Pool venues. The stock bolts upward when Professional Traders discover the
accumulation, barely pausing at the initial Dark Pool Buy Zone. It then continues
to run up into resistance before profit taking occurs, which stalls price but
does not cause a major price collapse. Runs of this type can be very lucrative
for a Technical Trader who understands the dynamics behind this price action.
Learning to use Accumulation, Large Lot, and Flow of Funds Indicators is
crucial to successful Swing Trading in these Market Conditions.
Summary
These patterns can also be seen on intraday charts, and can
be used by Day and Intraday Traders. Price patterns are important, but what is
even more critical to track is WHEN and WHERE the giant Buy Side Institutions,
who control trillions of assets start their bargain hunting buying activity.
Trade Wisely,
Martha Stokes CMT
TechniTrader technical
analysis using a MetaStock chart, courtesy of Innovative Market Analysis, LLC dba MetaStock
This weekly stock discussion is sponsored by
TechniTrader.com a MetaStock® Partner
Copyright ©2016 Decisions
Unlimited, Inc. dba TechniTrader. All rights reserved.
TechniTrader is also a
registered trademark of Decisions Unlimited, Inc.
Disclaimer: All statements
are the opinions of TechniTrader, its instructors and/or employees, and are not
to be construed as anything more than an opinion. TechniTrader is not a broker
or an investment advisor; it is strictly an educational service. There is risk
in trading financial assets and derivatives. Due diligence is required for any
investment. It should not be assumed that the methods or techniques presented
cannot result in losses. Examples presented are for educational purposes only.
METASTOCK LEIBOVIT VOLUME REVERSAL TUTORIAL FOR UNITED STATES NATURAL GAS - UNG - MARCH 14, 2016
From the desk of top market timer Mark Leibovit:
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